Circular No. 21/2009/TT-NHNN amending and supplementing certain articles of Circular No. 05/2009/TT-NHNN dated April 7, 2009 of the State Bank of Vietnam detailing the implementation of interest rate support for organizations and individuals borrowing medium and long-term bank loans to invest in new production and business development.

CIRCULAR

Amending and supplementing certain articles of Circular No. 05/2009/TT-NHNN dated April 7, 2009 of the State Bank of Vietnam on detailed implementation of interest rate support for organizations and individuals borrowing medium and long-term loans from banks to invest in new projects for production and business development dated April 7, 2009 of the State Bank of Vietnam detailing the implementation of interest rate support for organizations and individuals borrowing medium and long-term loans from banks to invest in new projects for production and business development Detailed implementation of interest rate support for organizations and individuals borrowing medium and long-term loans from banks to invest in new projects for production and business development Detailed implementation of interest rate support for organizations and individuals borrowing medium and long-term loans from banks to invest in new projects for production and business development

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Pursuant to Resolution No. 30/2008/NQ-CP dated December 11, 2008 of the Government on urgent measures to prevent economic decline, maintain economic growth, and ensure social welfare;

Pursuant to Decision No. 443/QĐ-TTg dated April 4, 2009 of the Prime Minister on interest rate support for organizations and individuals borrowing medium and long-term loans from banks to invest in new projects for production and business development;

The State Bank of Vietnam amends and supplements certain articles of Circular No. 05/2009/TT-NHNN dated April 7, 2009 detailing the implementation of interest rate support for organizations and individuals borrowing medium and long-term loans from banks to invest in new projects for production and business development as follows:

Article 1. Amending and supplementing Articles 2, 3, and 4 of Circular No. 05/2009/TT-NHNN as follows:

1. Market management agencies at all levels include: the Department of Domestic Market Management and Development under the Ministry of Industry and Trade; the Market Management Business Unit under the Department of Domestic Market Management and Development; the Market Management Sub-department under the Department of Industry and Trade of provinces and centrally-administered cities; and the Market Management Team under the Market Management Sub-department.

a) Point a Clause 3 is amended and supplemented as follows:

"a) Loans made by commercial banks and finance companies shall be reported according to the statistical reporting system applicable to units under the State Bank of Vietnam and credit institutions issued pursuant to Decision No. 477/2004/QĐ-NHNN dated April 28, 2004 of the Governor of the State Bank of Vietnam and Decision No. 143 TCTK/PPCĐ dated December 22, 1993 of the Director General of the General Statistics Office regarding the issuance of the secondary, tertiary, and quaternary industry classification systems and the national economic industry directory, including:

- Agriculture and forestry;

- Fisheries;

- Mining industry;

- Processing industry;

- Electricity, gas, and water supply industry;

- Construction industry, excluding construction projects: office buildings (high-rise) for lease; construction and repair of houses for sale and lease; construction projects serving production and business activities in industries not eligible for interest rate support;

- Wholesale and retail trade, repair of motor vehicles, motorcycles, bicycles, and household goods;

- Transportation, storage, and communication;

- Scientific research and technological activities;

- Loans to meet working capital needs with a production and business cycle exceeding 12 months in industries and sectors eligible for interest rate support as stipulated herein."

b) Supplement Clause 4 as follows:

"4. Medium and long-term loans made by commercial banks and finance companies that are not eligible for interest rate support include:

- Foreign currency loans;

- Loans in Vietnamese dong directly paid to the state budget (National Treasury) for taxes, fees, and charges;

- Loans in Vietnamese dong to purchase foreign currency to pay for imported consumer goods or to pay domestic distributors for imported consumer goods used as materials and assets for investment projects to develop production and business activities, where such imported consumer goods fall within the Consumer Goods List specified in Decision No. 07/2007/QĐ-BTM dated February 28, 2007 of the Ministry of Trade, Decision No. 10/2008/QĐ-BCT dated May 16, 2008 of the Ministry of Industry and Trade, and Decision No. 27/2008/QĐ-BCT dated August 11, 2008 of the Ministry of Industry and Trade;

- Loans reported under the following economic sectors according to Decision No. 447/2004/QĐ-NHNN and Decision No. 143/TCTK/PPCĐ: hotels and restaurants; financial services; activities related to property trading and consulting services; state administration and national defense, compulsory social insurance; education and training; health care and social assistance; cultural and sports activities; party, mass organization, and association activities; personal and public service activities; family work-for-hire activities in private households; activities of international organizations."

2. Amending and supplementing Clause 3 of Article 3 as follows:

"3. Interest rate support level for borrowers:

a) The interest rate support level for borrowers is 4% per annum, calculated based on the actual loan amount and term, within the period from April 1, 2009 to December 31, 2011.

b) In cases where borrowers have the need to borrow medium and long-term loans in Vietnamese dong from commercial banks and finance companies collateralized or guaranteed by securities, savings books, and other monetary forms (collectively referred to as securities), or where borrowers have deposits at commercial banks and finance companies and the loan falls within the scope of interest rate support, the interest rate support shall be implemented as follows:

- For securities purchased or generated before February 1, 2009, commercial banks and finance companies shall provide interest rate support for the entire outstanding loan balance; for securities purchased or generated from February 1, 2009 onwards, commercial banks and finance companies shall only provide interest rate support for the portion of the outstanding loan balance that exceeds the value of the collateral or guarantee provided by the borrower.

- For depositors who have deposits at commercial banks and finance companies generated from February 1, 2009 onwards: Commercial banks and finance companies require depositors to calculate the full value of their deposit account as self-funded capital for the investment project to develop production and business activities and shall only provide interest rate support for the portion of the outstanding loan balance that exceeds the value of the depositor's deposit account."

3. Amend and supplement Article 4 as follows:

a) Supplement point e of Clause 1 as follows:

"e) Providing complete and truthful information and documents to prove the purpose of the interest rate-supported loan and bearing legal responsibility for the accuracy of the information and documents provided to commercial banks and finance companies."

b) Point d Clause 2 is amended and supplemented as follows:

"d) Implement pre-loan, during-loan, and post-loan inspections, and coordinate among commercial banks and finance companies in loan inspection and assessment to ensure interest rate support in accordance with the provisions of the law. If it is discovered that the borrowing customer misuses the borrowed funds for purposes not eligible for interest rate support, then the previously supported interest on the loan shall be recovered; if recovery is not possible, then report to the competent state authority for handling or initiate legal proceedings against the borrower's breach of the credit contract."

c) Point l of Clause 2 is amended and supplemented as follows:

“l) Manage and retain files of loans receiving interest rate support as prescribed in Article 55 of the Law on Credit Institutions and related laws.”

Article 2. Implementation

1. This Circular takes effect from the date of signature. Loans that have arisen from April 1, 2009 and fall within the scope of interest rate support as stipulated in this Circular but have not yet been subject to interest rate support mechanisms shall be subject to interest rate support in accordance with the law from the date the loan arises. For loans receiving interest rate support at commercial banks and finance companies that do not comply with the provisions of this Circular, commercial banks, finance companies, and borrowers shall adjust the credit contracts from the date this Circular takes effect.

2. The Director of the Office, Heads of the Monetary Policy Department, and Heads of units under the State Bank, Governors of the State Bank branches in provinces and centrally governed cities, Chairmen of the Boards of Directors and General Managers (Directors) of commercial banks and finance companies, and borrowers are responsible for implementing this Circular./.